[00:00:00] Speaker 04: Case number 20-7080, Agudas Chasidich of the United States, a non-profit religious corporation versus Russian Federation of Foreign State et al. [00:00:10] Speaker 04: 10X USA incorporated a balance. [00:00:13] Speaker 04: Ms. [00:00:13] Speaker 04: Konakie for the balance, standing and jurisdictional finality. [00:00:17] Speaker 04: Mr. Risenberg for the balance, injunctions, sanctions, and interpretation of 1605A3. [00:00:22] Speaker 04: Mr. Lieberman for the appellees. [00:00:26] Speaker 01: Morning, counsel. [00:00:27] Speaker 01: Ms. [00:00:27] Speaker 01: Konakie, please proceed when you're ready. [00:00:29] Speaker 06: Good morning, your honors and may it please the court. [00:00:32] Speaker 06: I'm here on behalf of 10X USA or TENEM, a third party recipient of a post-judgment subpoena and the rule 60B movement below. [00:00:40] Speaker 06: In 2010, the district court entered a default judgment against the Russian defendants that found jurisdiction under the FSIA section 1605A3 for Habbad's claims. [00:00:52] Speaker 06: This decision was wrong at a minimum with respect to the claims against the Russian Federation. [00:00:58] Speaker 06: Because the property at issue in the dispute is located outside the United States, there was no basis for subject matter jurisdiction over Habad's claims as to the Russian Federation, and the default judgment as to the Russian Federation was therefore void. [00:01:12] Speaker 06: Because that decision was void, the injunction was void, the sanctions were void, and thus the subpoena served on my client Tenem to begin execution of the sanctions is also void. [00:01:25] Speaker 06: Habad's subpoena is premised on the allegation that Tenom, a Maryland company in the nuclear energy sector, possesses assets of the Russian Federation. [00:01:34] Speaker 06: Habad specifically even seeks information about Tenom's own assets. [00:01:39] Speaker 06: On the purported premise that Tenom is the alter ego of the Russian Federation. [00:01:44] Speaker 06: Now Tenom strongly denies this, but that is the asserted basis for the relevance of the subpoena. [00:01:49] Speaker 05: I thought it had alternative theories. [00:01:53] Speaker 05: in its subpoena, one of which was alter ego. [00:01:57] Speaker 05: So it wanted to know what assets Tenom had and then what its relationship was as well. [00:02:10] Speaker 06: Right, on the purported basis that Tenam is connected as the alter ego of the Russian Federation. [00:02:17] Speaker 06: The subpoena doesn't just, it's not like an information subpoena of say a bank asking about information about Russia. [00:02:25] Speaker 06: The information the subpoena is seeking is about Tenam and Tenam's assets, Tenam's commercial activities, Tenam's communications with its parent companies all the way up to the Russian Federation. [00:02:36] Speaker 03: What you're arguing about in this part of the case, if the judgment in Havad 1 is upheld by us, doesn't everything you're arguing go away then? [00:02:51] Speaker 03: Because the steps you took each depend upon doing away with that final judgment. [00:02:57] Speaker 03: Or do I misunderstand? [00:02:59] Speaker 06: With all due respect, Your Honor, just to clarify, the 2006 [00:03:03] Speaker 06: district court opinion, and then the 2008 decision of this court that affirmed in part and reversed in part, neither were a final judgment. [00:03:12] Speaker 06: It was a granting in part and denying in part motion to dismiss, and then the court of appeals reversed on some grounds. [00:03:24] Speaker 06: that decision, neither of those decisions established with any sort of finality jurisdiction over the Russian Federation. [00:03:32] Speaker 06: And we know this for several reasons. [00:03:35] Speaker 06: First, this court held in the De Shepple case that the 2008 decision- Leave out the other cases, just dealing with that case at the moment. [00:03:44] Speaker 06: Okay, sure. [00:03:44] Speaker 03: What was unfinal about the decision with respect to the immunity of the Federation? [00:03:51] Speaker 06: A number of aspects, Your Honor, and we know this by looking at the 2010 default judgment entered by the district court in that decision the court addressed all of the jurisdictional elements again in part because in 2006 that had only applied the non frivolous test. [00:04:08] Speaker 06: And then, also, it addressed new jurisdictional elements that hadn't been addressed at all in 2006. [00:04:15] Speaker 06: For example, whether the alleged agency and instrumentalities were in fact agencies or instrumentalities. [00:04:22] Speaker 06: That was a critical jurisdictional element that was completely unaddressed in 2006, and the district court found that it needed to still get to that question. [00:04:33] Speaker 06: There was nothing about [00:04:35] Speaker 06: jurisdiction in 2006 or in 2008 that was final and established. [00:04:40] Speaker 06: That decision was only made with respect to any notion of finality in 2010 in the default context. [00:04:47] Speaker 06: And because that decision was a default, the Russian defendants were not participating, the Habbad had clearly sought a motion for entry of a default judgment, and that is what the court granted. [00:04:57] Speaker 06: This case then falls squarely into the Bell helicopter and Practical Concepts and Sudan Biowin line of jurisdictional review. [00:05:06] Speaker 01: So the question in this, the question before us right now concerns whether 6DB is the right way to bring this up because even if you're right, let's just, just for purposes of this, let's just assume that you're right that there's a jurisdictional objection that could be made. [00:05:22] Speaker 01: that there was an opportunity to do that as you point out in your briefing, in your own briefing by filing a motion to quash. [00:05:28] Speaker 01: That didn't happen. [00:05:30] Speaker 01: And so then there was a 60B motion. [00:05:33] Speaker 01: And the question is, are you situated to bring the 60B motion? [00:05:36] Speaker 01: Because if you're not, then I think you would agree that you don't have a route now. [00:05:41] Speaker 01: You have to be a party that can actually raise the 60B. [00:05:44] Speaker 01: And under 60B, just everything about the terms of the rule [00:05:49] Speaker 01: seems to contemplate that it's a party to the underlying judgment. [00:05:54] Speaker 01: Now, I'm not disputing that the underlying judgment has some effect on you, because I get that, that it's a consequence of the underlying judgment that you're then within the range of a subpoena. [00:06:04] Speaker 01: But you're not actually the party. [00:06:07] Speaker 01: And it's difficult to see you as a legal representative, at least in the normal way we think about legal representatives, which is a trustee or somebody who's actually standing in the shoes of the party. [00:06:17] Speaker 01: And then if I thought that that's all 60B covered, then I'm not sure I see how you have authority to bring this before the district court and before us. [00:06:28] Speaker 01: And in service of the proposition that I do, that may be all that the rule covers, when I look at the rule, it talks about the parties in a number of situations. [00:06:38] Speaker 01: For example, 60B3 talks about whether there's fraud [00:06:43] Speaker 01: misrepresentation or misconduct by an opposing party, which talks about whether the party who supposedly considered the fraud is opposed to the party. [00:06:51] Speaker 01: It talks about newly discovered evidence, which by nature refers to actions of the party to the underlying judgment. [00:06:58] Speaker 01: And then the text, which you've engaged on may relieve a party or its legal representative, seems to make it an uphill battle to say that a non-party such as yourself can rely on 60B. [00:07:11] Speaker 06: At least three points on that your honor. [00:07:14] Speaker 06: And so, first, as to whether that was raised in our motion to squash the district court, recognize the jurisdictional issues were raised in our motion to squash that's it j7 98 and said that it that. [00:07:27] Speaker 06: Tenom had been raising jurisdictional issues, and so when Tenom sought certification of the denial of its motion to quash under 1292B, that court did engage on the exact jurisdictional arguments that we sought to certify for appeal, specifically this issue of whether Russia satisfied 1605A3, the B1 prongs, if you will. [00:07:52] Speaker 06: Second, [00:07:55] Speaker 06: That motion to squash was denied. [00:07:57] Speaker 06: And it was referred to earlier today the alternative is to wait for sanctions, which is, which was something that we could not do and those sanctions. [00:08:10] Speaker 06: provide further reason why tenon is strongly affected by the judgment, the threat of such sanctions. [00:08:17] Speaker 06: And then three, turning to the rule, the text of rule 60B. [00:08:22] Speaker 01: On the motion to quash, if there's a jurisdictional objection to the motion to quash on the basis that there's not subject matter jurisdiction in the underlying suit, and that's rejected, then that's something that can be an appeal. [00:08:34] Speaker 01: That's presumably something that could be appealed. [00:08:38] Speaker 06: Right, and we sought certification of. [00:08:40] Speaker 01: No, not certification. [00:08:43] Speaker 01: I mean, are you talking about 1292B certification? [00:08:45] Speaker 06: Yes. [00:08:47] Speaker 06: When the motion to quash was denied, our understanding was that if that decision was not certified for appeal, then we needed to wait until there was a decision compelling. [00:09:04] Speaker 05: And your understanding was based on what? [00:09:08] Speaker 06: I would have to get back to you on that. [00:09:17] Speaker 01: I mean, that's the issue in the other case. [00:09:18] Speaker 01: And if we thought that collateral order review is available when a jurisdictional objection to a motion to quash is denied, then that's a route to take. [00:09:29] Speaker 01: Here, that didn't happen. [00:09:31] Speaker 01: I don't even know that it was raised in the motion to quash. [00:09:33] Speaker 01: But in any event, right now, all we have before us is the 60B route. [00:09:38] Speaker 01: And the 60B route, putting aside the motion to quash, requires that a party who brings it be either a party or legal representative. [00:09:48] Speaker 06: Right. [00:09:48] Speaker 06: So, on the. [00:09:50] Speaker 06: We were not trying to seek a collateral order appeal the way that the EB was in that we were not asserting tenants own immunity and so that was why we didn't think that tandem had a direct appeal of the. [00:10:07] Speaker 06: of the denial of the motion to quash, but I do want to move on to the text of rule six to be to get to that part of your question. [00:10:21] Speaker 06: Courts, however, have held that a legal representative includes any party alleged to be in privity with the judgment debtor who would be relieved. [00:10:31] Speaker 06: Habad's allegations with respect to Tenem is exactly that, that there is some sort of a privity relationship. [00:10:39] Speaker 06: fundamental basis of relevance of its subpoena. [00:10:42] Speaker 06: And while TENEM strongly denies that, we've pointed to cases that show that when evaluating standing, including in the context of an issue and claim preclusion and in the context of a non-party, third-party intervener defendant. [00:10:58] Speaker 01: Who would be relieved under your theory? [00:11:00] Speaker 01: The text of the rule says the court may relieve a party or its legal representative from a final judgment order. [00:11:07] Speaker 01: Who would be relieved? [00:11:09] Speaker 06: on Habbad's allegations, certainly Tenom would be relieved because Tenom is alleged to be the alter ego. [00:11:15] Speaker 06: And so therefore it would- No, not on the allegations. [00:11:18] Speaker 01: Cause I think the allegations, I understand your point about the allegations. [00:11:21] Speaker 01: The allegations just could cut both, could equally cut in the other direction too. [00:11:25] Speaker 01: If you flip it, it's a little bit difficult to attach, at least in my mind, too much significance to that because either side could make use of it. [00:11:32] Speaker 06: Well, Tenom is the party that has been dragged in and is attempting to assert defenses to be relieved of compliance with the subpoena. [00:11:40] Speaker 06: So the opponent's allegations, just as in the case of a third party intervener defendant movement, would you rely on the record that there is and the allegations from the opposing party? [00:12:00] Speaker 06: Um, obviously also the Russian Federation would be relieved from the judgment, but because Russia would be relieved from the judgment and tenants only connection, the only relevance to the, uh, to the case at all is tenants alleged relationship to Russia. [00:12:17] Speaker 06: There's no alleged relationship to the other parties. [00:12:19] Speaker 01: So if Russia, if Russia needs to be relieved from the judgment, Russia, Russia can seek 60 B relief, but it hasn't. [00:12:26] Speaker 01: And so it's, it's, [00:12:29] Speaker 01: you have to support the notion that you can bring the 60B relief. [00:12:35] Speaker 06: Beyond the privity, I'd just like to talk briefly about that. [00:12:39] Speaker 03: Privity is something more than simply being related in some fashion. [00:12:43] Speaker 03: Wouldn't privity require something close to being able to step into the shoes like the legal representative normally means? [00:12:49] Speaker 06: Right, and that includes an alter ego. [00:12:51] Speaker 06: The only reason why Tenom's assets could possibly be relevant in the suit is because [00:12:56] Speaker 06: Habbad is pursuing information about those assets in an attempt to, with the purpose of executing the judgment against Tenem, not against Russian assets that Tenem holds in its possession, but Tenem's own assets. [00:13:13] Speaker 03: They're not attempting to execute against them at this point, are they? [00:13:16] Speaker 03: They're simply trying to find out what's there. [00:13:19] Speaker 03: with the possibility that they may turn out to be traceable to Russia. [00:13:22] Speaker 06: Well, with all due respect, that's not what the subpoena is seeking. [00:13:25] Speaker 06: The subpoena is seeking information about what TENEM possesses as to TENEM's own assets, TENEM's commercial activities, TENEM's relationship with its own board of directors, its own commercial activities, its own activities in the United States. [00:13:41] Speaker 03: Well, you're not bringing anything concerning the breadth of the subpoena. [00:13:47] Speaker 03: That would be a matter of motion to cautious, but talking about the breath of spina you're trying to set aside a judgment here. [00:13:56] Speaker 06: Right. [00:13:56] Speaker 06: And we say, when you look at the record as a whole, the only way that there is relevance, which the judicial court has already held when it denied our motion to quash, the only basis for relevance of this broad subpoena is that tenon is alleged. [00:14:10] Speaker 06: It's on the allegation that tenon is the alter ego. [00:14:13] Speaker 06: If tenon is not alleged to be the alter ego. [00:14:15] Speaker 03: You understand we start with a presumption of finality on jurisdiction from a judgment. [00:14:21] Speaker 03: And you're moving to set one aside. [00:14:26] Speaker 03: That's a heck of a burden, isn't it? [00:14:29] Speaker 06: Well, with respect to 60B4, the issue is not discretionary. [00:14:34] Speaker 06: If the judgment is void, then this court is without subject matter jurisdiction. [00:14:38] Speaker 06: And we would say that we would submit that this court is without subject matter jurisdiction to even reach the 60B standing, because the court must assure itself of subject matter jurisdiction. [00:14:50] Speaker 06: In this case, there is no subject matter jurisdiction with respect to [00:14:54] Speaker 01: I don't understand that point, that without jurisdiction, even to decide whether a party can bring a 60B motion, that means that, wouldn't that mean that any party in the world could bring a 60B motion, even if they have no relation whatsoever to the underlying suit, but then a court would have to decide the merits of the 60B motion without deciding whether the party could bring it? [00:15:13] Speaker 06: So here 10 M has no doubt article. [00:15:17] Speaker 06: We were subpoenaed into the case. [00:15:19] Speaker 06: There is an allegation that 10 M has to. [00:15:22] Speaker 06: So, the process has been served 10 M has the can satisfy the article three standing and in fact, post judgment subpoena recipients there's no doubt can raise subject matter jurisdiction. [00:15:35] Speaker 06: That this court has to address subject matter jurisdiction should not be controversial. [00:15:40] Speaker 03: When a subpoena recipient raises subject matter jurisdiction, the core of the notion that a third party can come in years later and effective validity under the motion to set aside is the 60 B motion is. [00:15:55] Speaker 03: At least controversial. [00:15:59] Speaker 06: We understand it's not a frequent occurrence, but there's no doubt in this case that TENEM can raise the argument that there is no subject matter jurisdiction. [00:16:08] Speaker 06: That is the Vera case. [00:16:10] Speaker 03: If you can bring the case at all, perhaps you could. [00:16:13] Speaker 03: But the question we're raising is whether you can bring a 60B motion on the basis that you have here. [00:16:21] Speaker 06: And we think we've satisfied the standing for the privity argument. [00:16:27] Speaker 06: And then the other point, which I wanted to add, is that TENEM is strongly affected by the judgment. [00:16:33] Speaker 06: I point out in a very unique circumstance here, the subpoena is targeting TENEM's assets. [00:16:38] Speaker 06: But there's no allegation that TENEM could ever satisfy the injunction. [00:16:42] Speaker 06: This is a very unique circumstance. [00:16:44] Speaker 06: So those sanctions, those $50,000 a day sanctions, will just continue to add up, add up, add up, targeting Tenom's assets. [00:16:51] Speaker 06: But Tenom has no way to satisfy the injunction. [00:16:55] Speaker 06: That is a unique one-off circumstance in which Tenom is strongly affected. [00:17:01] Speaker 01: I don't doubt. [00:17:02] Speaker 01: For my purposes, I don't doubt that Tenom is affected. [00:17:06] Speaker 01: Of course, you're affected because the subpoena is directed against you as a consequence of the [00:17:12] Speaker 01: previous judgment. [00:17:13] Speaker 01: The question is whether your jurisdictional objection is properly asserted by the Rule 60B as opposed to via motion to quash, which you yourself in your briefing point out as a route. [00:17:23] Speaker 01: And I think that's the question that's before us under Rule 60B. [00:17:27] Speaker 01: Let me make sure that my colleagues don't have additional questions for you on these questions that you have, because I know your colleague on your same side still has an argument to make on some other issues. [00:17:40] Speaker 01: Okay, then why don't we hear from Mr. Riesenberg for now and we'll give whichever one of you is going to take it a little bit of time for rebuttal. [00:17:48] Speaker 06: Thank you, Your Honor. [00:17:49] Speaker 01: Mr. Riesenberg. [00:17:52] Speaker 00: May it please the court. [00:17:53] Speaker 00: We now turn to the injunction and the contempt sanctions pursuant to which 10M has been subpoenaed in relation to quote, 10M's own assets, end quote. [00:18:02] Speaker 00: And then again, that's from the transcript. [00:18:05] Speaker 00: That's a statement by opposing counsel. [00:18:08] Speaker 00: So the US government has repeatedly described the remedies in this case the injunction and the contempt sanctions as quote entirely without precedent internationally and quote, including at page 141 of the joint appendix. [00:18:23] Speaker 00: Neither Chabad nor the District Court have ever identified any prior case by any court anywhere in the world, including in the United States, but nowhere else in the world where any court has imposed an extraterritorial turnover order against a foreign sovereign state. [00:18:41] Speaker 00: It is entirely anomalous. [00:18:44] Speaker 00: This unprecedented exercise of judicial power is literally quote an extraordinary circumstance and quote, which would justify 10 Ms request for relief under 60 be. [00:18:55] Speaker 00: The district court's orders should be vacated, therefore, including because they are contrary to the Foreign Sovereign Immunities Act, including the comprehensive scheme for addressing the property of foreign sovereign states and the public interest, which is a requirement of any injunctive order, whether it's a permanent injunction or a preliminary injunction. [00:19:15] Speaker 00: The district court in its 2010 order entirely skipped consideration of the public interest in violation of its statutory duty under 28 USC 1608E to evaluate Khabad's quote, right to relief. [00:19:31] Speaker 00: For all these reasons, both the injunctive order and the sanctions should be vacated as well as all the subpoenas attempting to seek information pursuant thereto. [00:19:44] Speaker 00: So I'll first start by looking at the statutory aspect, meaning the interpretation of 1609 and 1610. [00:19:51] Speaker 00: Now, the US government at page 135 of the Joint Appendix draws our attention to the pre-enactment history of the Foreign Sovereign Immunities Act. [00:20:02] Speaker 00: Now, prior to the FSIA, the property of a foreign state was immune from execution everywhere in the world without geographical limitation. [00:20:13] Speaker 05: Are you referencing the green brief? [00:20:20] Speaker 00: Meaning Mr. Feldman's amicus brief, Judge Rogers, just to clarify? [00:20:25] Speaker 05: Yes, as opposed to comments that were submitted by the United States in the district court at some point, and it's not clear to me what remains. [00:20:36] Speaker 00: I'm referring to the statements of interest filed at page 135. [00:20:43] Speaker 05: Right, but it hasn't filed an amicus brief, correct? [00:20:46] Speaker 05: And at some point circumstances changed? [00:20:53] Speaker 00: Well, this position that the United States government has taken in this case has been consistent across presidential administrations. [00:21:02] Speaker 05: I wasn't suggesting an administration change made a difference. [00:21:07] Speaker 05: I think circumstances have changed given what the district court has done. [00:21:11] Speaker 00: Well, most recently, the US government maintained its consistent position in December of 2019. [00:21:20] Speaker 00: We're not aware of any change in position. [00:21:22] Speaker 00: It is certainly not too late for this court to ask the US government's views. [00:21:27] Speaker 00: That's something that this court has discretion to do, and 10M would have no objection whatsoever. [00:21:33] Speaker 05: But you have not requested that we do so. [00:21:36] Speaker 05: That I noted in your brief, all right? [00:21:38] Speaker 05: But in any event, your position is the United States thinks what? [00:21:44] Speaker 05: Foreign policy would be better off if this case stopped. [00:21:49] Speaker 00: Well, the US government would not be subject to a $135 million contempt sanctions order by a foreign court. [00:21:57] Speaker 00: And the US government's arguments in foreign court would not be undermined in any of the [00:22:03] Speaker 00: going by the numbers in the Helmerich decision by the Supreme Court. [00:22:07] Speaker 05: So the answer to my question is yes. [00:22:10] Speaker 00: Yes, it's a strong yes, Judge Rogers. [00:22:13] Speaker 00: The US government needs to defend against the orders of foreign courts in 1,000 cases at any given time before 100 courts in the world. [00:22:23] Speaker 00: And undermining the US government's defenses with respect to injunctive orders and contempt sanctions is strongly contrary to foreign policy. [00:22:34] Speaker 00: That is a public interest issue and the district court gave it short shrift when it ordered injunctive relief in this case. [00:22:42] Speaker 05: That's different from not considering the matter. [00:22:46] Speaker 00: It's improperly weighing the factors, which is frequently the way this district court has described the way this district court has described abuse of discretion. [00:22:57] Speaker 00: Also, I want to distinguish between the the the district courts discussion of public interest in 2015. [00:23:05] Speaker 00: when the contempt sanctions were issued and the 2010 order where the district court did not discuss any issues of merits or remedies or the public interest aspect of the injunction whatsoever. [00:23:19] Speaker 00: There is not one word in the 2010 order addressing the public interest as required for injunctive relief. [00:23:28] Speaker 00: But this is the issue of the public interest, Judge Rogers, and that's only one of the issues that we're raising today. [00:23:35] Speaker 00: We're, of course, also pointing out the violations of the Foreign Sovereign Immunities Act, particularly the Comprehensive Statutory Scheme, which under 1609-10 and 1610, abrogates foreign sovereigns' execution immunity only with respect to property in the United States. [00:23:56] Speaker 00: There is no abrogation of the immunity to which property is entitled outside the United States. [00:24:04] Speaker 00: And that's not just a diplomatic nicety, but a judicially enforceable norm, as the case law from before the FSIA shows very clearly. [00:24:13] Speaker 00: For example, I would point out the Dexter case at 43F2705. [00:24:16] Speaker 00: And then one final point. [00:24:20] Speaker 00: before I reserve the remainder of our time for rebuttal or await any of your other questions. [00:24:28] Speaker 00: 1606, 28 U.S.C. [00:24:30] Speaker 00: 1606 is the pillar of the district court's conclusions, the pillar of Chabad's argument. [00:24:39] Speaker 00: That's where they say the power to order extraterritorial injunctions comes from. [00:24:44] Speaker 00: 1606 doesn't refer to remedies at all. [00:24:48] Speaker 00: It says that a foreign state shall be, quote, liable to the same extent as a private party. [00:24:54] Speaker 00: That is not a clear textual discussion of remedies whatsoever, and to apply that to justify extraterritorial injunctions [00:25:02] Speaker 00: which have never occurred in the history of this country or any other would be a violation of the canon against the extraterritorial application of law which the supreme court emphasized in key oval morrison rjr nimbusco and numerous you may well be correct as to the merits of your cause but doesn't it go back still to the issue that your colleague argued as to whether 60b appeal 60b is available to you and therefore this appeal is available [00:25:32] Speaker 00: For these arguments, there is no question we would need standing. [00:25:39] Speaker 03: It's not exactly the same as traditional Article 3 standing. [00:25:43] Speaker 03: It's a finality of judgment issue. [00:25:47] Speaker 00: Well, Judge Sentel, I would draw your attention to the Second Circuit's decision in Grace, which was also a case involving a final judgment. [00:25:57] Speaker 00: So all of the presumptions that you've described would also be applicable to the Second Circuit's decision in Grace. [00:26:04] Speaker 00: The reason why the movement in that case had standing was because the opposing party's strategy was, quote, to collect money from the movement, end quote. [00:26:17] Speaker 00: On that basis, the Second Circuit said general principles of standing make this motion under Rule 60 be appropriate. [00:26:28] Speaker 00: In this case, Chabad is trying to collect money from 10M. [00:26:33] Speaker 05: Let me just be clear about one thing. [00:26:36] Speaker 05: I mean, I know you say the case isn't relevant at all, but at least there is a distinction here between trying to find out what assets [00:26:48] Speaker 05: VEB has, and whether there is any authority to attach those assets. [00:26:55] Speaker 05: And the latter has not happened yet. [00:26:58] Speaker 00: It hasn't happened, Judge Rogers, but standing is almost always evaluated based on the allegations at the outset of a lawsuit. [00:27:06] Speaker 05: Well, there's where you're hurting yourself because the district court said, you know, it couldn't order the type of relief you want. [00:27:17] Speaker 05: All right, because it would have no authority to do so under Rule 60B. [00:27:22] Speaker 05: And to that extent, applying a statutory standing analysis, the third prong of standing would drop out. [00:27:31] Speaker 00: I just want to quote the district court, Judge Rogers. [00:27:34] Speaker 05: I'm quoting the district court. [00:27:38] Speaker 00: Understood. [00:27:39] Speaker 00: Just to supplement that quote, the district court said that there was no serious argument that Chabad stands in the shoes, sorry, apologies. [00:27:47] Speaker 00: There is no serious argument that TENEM stands in the shoes of the Russian Federation. [00:27:51] Speaker 00: We found that quote remarkable because that is precisely Hubbard's argument, whether it's serious or not. [00:27:58] Speaker 00: Hubbard says that we do stand in the shoes of the Russian Federation. [00:28:02] Speaker 00: That's why they're trying to pierce our veil. [00:28:04] Speaker 00: That's what they said on the transcript during oral argument to the district judges to the district judge and [00:28:11] Speaker 00: it. [00:28:12] Speaker 00: That is their argument, and that should be sufficient to give us standing to provide any legal arguments that correspond to their theory of the case, including under Rule 60 B. And we'll reserve the remainder of our time for rebuttal unless there are further questions. [00:28:30] Speaker 01: No further questions. [00:28:31] Speaker 01: Thank you, Mr Reisenberg. [00:28:33] Speaker 01: We'll give you a little bit of time for rebuttal. [00:28:35] Speaker 01: Mr Lieberman will hear from you now. [00:28:38] Speaker 02: It pleased the court. [00:28:39] Speaker 02: Good morning again. [00:28:41] Speaker 02: I'm going to try to address the issues raised by Tinam in the following fashion, subject, of course, to the order in which the court wishes to go into these issues. [00:28:54] Speaker 02: First, I'd like to discuss the 60B issue. [00:28:57] Speaker 02: Then I'd like to go into the jurisdictional finality issue, which has been raised by several members of the panel. [00:29:03] Speaker 02: And then I'd like to turn to some of the merits issues. [00:29:06] Speaker 02: But first, I do want to correct [00:29:10] Speaker 02: One point that was made by Mr. Riesenberg or his colleague in response to Judge Rogers question, there are two theories that underlay the subpoena to Tenom. [00:29:22] Speaker 02: One was the question of whether or not Tenom was an alter ego of the Russian Federation. [00:29:28] Speaker 02: And the second was whether Tenom holds assets of the Russian Federation, which could potentially be subject to execution, that is Russian owns property. [00:29:40] Speaker 02: Starting with Rule 60B, we start obviously with the language of the statute of party or its legal representative. [00:29:49] Speaker 02: I don't think there's a serious question that Tenom is not a legal representative of Russia, even though in this lawsuit, it seems to be that what it's trying to do is to get a vacator of the actual ruling against Russia. [00:30:10] Speaker 02: But they're not a legal representative of Russia under Rule 60B. [00:30:15] Speaker 02: Language of Rule 60B, as Judge Lamberth pointed out, they do not have the right to challenge the underlying judgment. [00:30:26] Speaker 02: They haven't been able to cite any cases in which an entity that was not [00:30:37] Speaker 02: a third party that was a recipient of discovery. [00:30:41] Speaker 02: They challenged the validity of an underlying judgment. [00:30:47] Speaker 02: They cite two cases, Vera versus the Republic of Cuba. [00:30:52] Speaker 02: That wasn't a Rule 60B case, but it was also a case where there was a default judgment against Cuba. [00:30:57] Speaker 02: Cuba never appeared at all. [00:31:00] Speaker 02: Cuba followed the practical concepts option two scenario that was sketched out by [00:31:06] Speaker 02: Justice Ginsburg and her decision and practical concepts. [00:31:11] Speaker 02: The other case that they cite, the only other cases is Housing Business Journal versus Office of the Controller case. [00:31:18] Speaker 02: That was also not a Rule 60B decision. [00:31:20] Speaker 02: It was a pending lawsuit where there was a subpoena to a third party, which was permitted to challenge the district court's subject matter jurisdiction. [00:31:28] Speaker 02: So they've cited no Rule 60B cases where they should be considered a representative. [00:31:33] Speaker 02: And as the chief judge's question about relying on pleadings and positions the parties take with respect to the availability of 60B relief made clear, that's a two-edged sword. [00:31:48] Speaker 02: If tenum is taken at its word, that it should be considered a representative or a privy of Russia, then under principles of issue and judgment preclusion, [00:32:03] Speaker 02: they are a stop under race judicata as well as jurisdictional finality. [00:32:15] Speaker 02: It would be precluded under principles of race judicata from challenging the underlying judgment. [00:32:20] Speaker 02: Let's recall here, this is a case in which Russia appeared, litigated for several years, lost in part and won in part from sovereign immunity and the district court. [00:32:32] Speaker 02: took an appeal and on appeal the portion that it had lost below was reversed. [00:32:42] Speaker 02: That's with respect to the, I'm sorry, the portion that it had lost below was affirmed. [00:32:49] Speaker 02: That's with respect to the archive. [00:32:51] Speaker 02: The portion that it had run below with respect to that library was reversed on sovereign immunity issues. [00:32:59] Speaker 02: It went back to the district court, it continued to participate in the litigation for a year when faced with discovery to which it needed to respond, it then withdrew. [00:33:10] Speaker 02: So this is a practical concepts option one case. [00:33:15] Speaker 02: Russia appeared, it fought on jurisdiction, it lost, it's a final judgment. [00:33:21] Speaker 02: So just on race judicata, if they are a representative, [00:33:27] Speaker 02: which they would need to argue to get up under 60B, then they lose under race judicata. [00:33:37] Speaker 01: Let's just say for argument purposes, and I'm not saying that I necessarily agree with this or disagree with this, but let's just say for argument purposes that we accept [00:33:45] Speaker 01: your position that TENEM cannot bring the 60B motion because it's not a part of your legal representative. [00:33:54] Speaker 01: Let's just also say, and I know you'll resist this, but just bear with me. [00:33:57] Speaker 01: Let's just also say that they're right about the appropriate reading of the statute of 1605A3, and therefore there wasn't jurisdiction to issue the underlying default judgment. [00:34:10] Speaker 01: What are they supposed to do? [00:34:15] Speaker 02: I am so happy you asked that question, Ron, because it leads right into the question of jurisdictional finality. [00:34:22] Speaker 02: I want to put aside for a second. [00:34:25] Speaker 02: I would like to discuss this, if the court is interested in the issue, as to whether this court, in its Kabbad decision in 2008, properly interpreted section 1605A3. [00:34:37] Speaker 02: But I don't want to deal with that right at the moment. [00:34:39] Speaker 02: Let's assume, pursuant to your honor's question, that [00:34:44] Speaker 02: this court follows the four subsequent decisions of the DC circuit and says the Chabad court got it wrong. [00:34:51] Speaker 02: We dispute that and I'd like to get to that point, but I'm going to answer your honor's question. [00:34:55] Speaker 02: So there are two separate questions. [00:35:00] Speaker 02: One is, is this court's decision in Chabad one that was sufficiently articulated [00:35:11] Speaker 02: and describe. [00:35:12] Speaker 01: Well, can I just ask you just to get a quick answer at least on one part of it, which is, is there anything they could do? [00:35:19] Speaker 01: No. [00:35:20] Speaker 01: You think there's nothing they can do. [00:35:21] Speaker 01: So even if the decibel reading of 16A5A3 is taken to be correct, I know you don't think it was correct, but for our purposes, it's the precedent that's on point at this juncture in time, then the underlying judgment [00:35:37] Speaker 01: was issued without subject matter jurisdiction. [00:35:40] Speaker 01: And TENEM has never had an opportunity to make that argument because it wasn't ever in the initial case. [00:35:46] Speaker 01: That was Russia in the initial case. [00:35:48] Speaker 01: So a party that was never in the initial case and is now totally affected by the judgment, your view is that there's nothing they can do about it. [00:35:56] Speaker 02: Nothing they can do may be too strong because, for example, there are lots of types of property that are immune under the statute from attachments. [00:36:07] Speaker 02: There are all sorts of arguments that they can make that they're not an alter ego of Russia. [00:36:12] Speaker 02: If they win on not being an alter ego of Russia. [00:36:16] Speaker 01: There's nothing they can do to take on the existence of jurisdiction to issue the underlying judgment that then begets your efforts to obtain relief against them. [00:36:26] Speaker 02: That's correct. [00:36:27] Speaker 02: And let me explain exactly why. [00:36:29] Speaker 01: And what about the doctrine that says that you can defend against a subpoena, you can quash a subpoena based on the lack of subject matter jurisdiction to issue the underlying judgment? [00:36:37] Speaker 02: Right. [00:36:38] Speaker 02: So this court in Chabad, and I don't think there's any doubt about this, if you look at the decessible majority opinion, the majority opinion does not dispute that the D.C. [00:36:52] Speaker 02: Circuit in Chabad made a decision that the Russian Federation was not immune with respect to either the archive or the library. [00:37:01] Speaker 02: The issue in decessible is whether or not the decision was articulated with sufficient [00:37:07] Speaker 02: expansiveness that it should be entitled to presidential effect in the circuit. [00:37:12] Speaker 02: But the decision was made. [00:37:15] Speaker 02: It went back down. [00:37:19] Speaker 02: When it went back down, the district court made the appropriate findings to enter a final judgment. [00:37:27] Speaker 02: At that point, Russia had withdrawn, but they had decided to exercise practical concepts. [00:37:35] Speaker 02: Option one, they fought on the issue. [00:37:38] Speaker 02: That judgment is final with respect to sovereign immunity for purposes of this case. [00:37:43] Speaker 01: So suppose that in Dissepol, the cert petition was granted and the Supreme Court in Dissepol agrees with the view espoused by the United States in Dissepol in its brief, which is that [00:37:54] Speaker 01: the Dissepol view, our court's view of 16.05A3 and Dissepol was correct. [00:38:01] Speaker 01: So now, then we know that the Supreme Court would have a precedent, just hypothetically, the Supreme Court would have a precedent that says that the way Shevaad Wan looked at it turns out to have been incorrect. [00:38:12] Speaker 01: You'd still say that even though the Supreme Court precedent says [00:38:15] Speaker 01: that the jurisdictional basis of Shabadwan was incorrect, that this party, TENEM, who has never had an opportunity to litigate that would be out of luck. [00:38:24] Speaker 02: That's absolutely correct. [00:38:26] Speaker 02: And it's the Supreme Court's decision and federated department stories upon which I would be relying. [00:38:32] Speaker 02: And also this court's decision in GSS Group versus Liberia, both of which are discussed in our brief. [00:38:39] Speaker 02: In GSS Group versus Liberia, [00:38:42] Speaker 02: This court, a 2016 decision, said once an issue was raised and determined, it is the entire issue that is precluded, not just the particular arguments raised in support of it in the first case. [00:38:53] Speaker 02: And in federated department stores, the Supreme Court said on jurisdictional finality, this is true even if the judgment, quote, may have been wrong, arrested on a legal principle, subsequently overturned in another case. [00:39:08] Speaker 02: So even if the law changes, [00:39:10] Speaker 02: You've got jurisdictional finality in the Khabad case regarding sovereign immunity with respect to the Russian Federation. [00:39:17] Speaker 02: Now there are lots of other issues that Tanim could challenge on. [00:39:21] Speaker 02: For example, statutorily exempt property, are they the alter ego or not? [00:39:25] Speaker 02: But if they are the alter ego, right, and this decision has been determined against the Russian Federation, they are bound by that. [00:39:34] Speaker 02: They are stuck. [00:39:35] Speaker 02: And it makes good sense that that would be the case, because in this case, Your Honor, [00:39:39] Speaker 02: we have five or six or seven subpoenas out to different entities, including US banks that are holding Russian Federation assets. [00:39:50] Speaker 02: If every time we seek to enforce a subpoena, a non-party gets to come in and really re-litigate the question that this court decided back in 2008, we would have chaos. [00:40:02] Speaker 02: And that's exactly why we have the jurisdictional finality doctrine. [00:40:08] Speaker 02: I hope that answer was, [00:40:09] Speaker 02: clear and unambiguous enough. [00:40:11] Speaker 02: But I don't think Tenom can challenge this issue. [00:40:14] Speaker 02: I don't think the Russian Federation can challenge this issue. [00:40:17] Speaker 02: I don't think anybody else can challenge this issue. [00:40:19] Speaker 02: In the Khabad case, it has been decided for this case. [00:40:25] Speaker 02: And going back to Rule 60B, we've got to go by the language of that rule. [00:40:33] Speaker 02: The language is clear. [00:40:35] Speaker 02: They're not the party. [00:40:36] Speaker 02: They're not a representative. [00:40:37] Speaker 02: They make the argument about strongly effected. [00:40:39] Speaker 02: That strongly effected rule has never been applied in the circuit. [00:40:44] Speaker 02: There is one decision by a district court on the strongly effected doctrine in this circuit and the district court rejected strongly effected and strongly effected came from the grace case. [00:40:57] Speaker 02: And as judge Lamberth pointed out below, and as many other courts have pointed out, including the grace case itself, [00:41:04] Speaker 02: There was an exceedingly narrow exception to a well-established rule. [00:41:09] Speaker 02: And it was there to prevent a fraud perpetrated on the court to settle a third party with a judgment debt. [00:41:18] Speaker 02: That's what happened in Grace. [00:41:20] Speaker 02: And that's why the Second Circuit was so careful to say this was a very narrow exception. [00:41:25] Speaker 02: It cannot possibly be that Tenam is seriously arguing [00:41:33] Speaker 02: that when Chabad brought this lawsuit to get back books that were first taken in 1917, that it's been fighting for 100 years to get these books back, that the reason it brought that lawsuit, the reason it brought the lawsuit and went to the district court and the DC Circuit on the sovereign immunity issue was to somehow stick tenon 12 years later. [00:41:56] Speaker 02: That's just not a credible argument. [00:41:58] Speaker 02: So they have no mechanism to challenge this under 60B. [00:42:03] Speaker 02: On jurisdictional finality, again, I think even if you were to decide in this case, and now I'd like to turn to the merits of the 1605A3 issue, if I may, Your Honor, but even if you would decide that you weren't going to revisit the cesspool or the Simon case, jurisdictional finality doesn't allow for [00:42:33] Speaker 02: the judgment against the Russian Federation to be challenged in this case. [00:42:38] Speaker 02: And again, that's practical concepts. [00:42:41] Speaker 02: The law is, I would submit very, very clear on that. [00:42:47] Speaker 02: So let me turn to the question of whether or not the Chabad decision is one that this court needs to follow or alternatively, whether this is an issue as to which the court might want to [00:43:04] Speaker 02: refer this matter to an en banc panel. [00:43:12] Speaker 03: Are you here or do you want to get into that? [00:43:19] Speaker 02: Well, let me start with this, Your Honor. [00:43:25] Speaker 02: First, Judge Lamberth wrote an extraordinarily clear and [00:43:33] Speaker 02: elegant 50-4 page decision explaining precisely why he believes that the DC Circuit is bound by the DC Circuit's decision in Chabad. [00:43:44] Speaker 01: Right. [00:43:45] Speaker 01: And we issued a decision in Dissepol that reached the decision conclusion that it did, and that's precedent in our court, whether you agree with it or not. [00:43:53] Speaker 01: And I understand that there are arguments in both directions. [00:43:56] Speaker 02: Right. [00:43:56] Speaker 01: That's a precedent in our court on what happens with the Chabad result going forward. [00:44:01] Speaker 02: I understand that unless this court issues a new decision with an iron's footnote or we'd have to go on. [00:44:09] Speaker 01: The full court would have to do something with it either by taking the issue on bank or by issuing an iron's footnote. [00:44:16] Speaker 01: There's a lot of other issues in this case with respect to 6DB and everything that we'd have to get to before we'd ever get to something like that. [00:44:22] Speaker 02: Right. [00:44:22] Speaker 02: Now, my second point was, I think, [00:44:28] Speaker 02: explains precisely why the court need not reach that issue. [00:44:31] Speaker 02: Under jurisdictional finality, whether or not the decision was clearly enough articulated to be a presidential decision, it was a decision on the merits of the Florence Cyber Immunity Act this year. [00:44:43] Speaker 03: We're not adjudicating today whether it should be precedent for other cases. [00:44:47] Speaker 03: What we're talking about in this one is binding here. [00:44:49] Speaker 03: I'm just not sure you want to get into the, or drag us toward the [00:44:55] Speaker 02: then your honor, I will exercise the wisdom to not make those arguments and simply refer the court to Judge Lambert's decision on that point, should the court think it needs to reach the issue. [00:45:14] Speaker 02: But again, if the court needs to reach the issue, this is a case that I think would be very appropriate for on-bank review, but you need not get there. [00:45:25] Speaker 02: Okay. [00:45:26] Speaker 01: My colleagues don't have. [00:45:28] Speaker 05: If you prevail on other grounds. [00:45:32] Speaker 02: That's correct. [00:45:33] Speaker 05: Yes. [00:45:33] Speaker 05: All right. [00:45:33] Speaker 05: Well, you're not waving anything. [00:45:35] Speaker 02: It's all I know. [00:45:36] Speaker 02: If we, if we lose on the other grounds and this court gets to the issue for the reasons set forth in the brief, the reasons set forth in, um, judge Randolph's dissent in the de Chappelle case for the reasons set forth in judge Lambert's ruling. [00:45:55] Speaker 02: Our view is that the proper interpretation of 160583 is the conclusion that Judge Lamberth has come to and the conclusion reflected in the judgment of the DC Circuit in the Chabad case. [00:46:09] Speaker 02: And if any of the panel would like, I'm happy to go into those substantive issues. [00:46:13] Speaker 02: But Your Honor, Judge Rogers is exactly correct. [00:46:16] Speaker 02: We're not waiving those issues at all. [00:46:20] Speaker 01: Okay. [00:46:20] Speaker 01: Let me make sure my colleagues don't have additional questions for you, Mr. Lieberman. [00:46:26] Speaker 01: Thank you. [00:46:27] Speaker 01: Thank you for appellants. [00:46:29] Speaker 01: We'll give you two minutes back for rebuttal. [00:46:31] Speaker 01: And I know you were going to choose who's going to give the rebuttal. [00:46:34] Speaker 06: Thank you, your honor. [00:46:35] Speaker 06: Um, just to start, uh, like Mr Lieberman said that, uh, this case would be analyzed as a practical concepts option. [00:46:44] Speaker 06: One case, but whether it's at 10 m challenging the [00:46:48] Speaker 06: finality of the judgment or otherwise. [00:46:53] Speaker 06: This is a practical concepts option to case because this the entry of the 2010 default decision is the just is the decision that took jurisdiction over the Russian Federation with any [00:47:06] Speaker 06: alleged sense of finality because that decision was a default, even though the Russian Federation did previously appear, that merely puts this case squarely in the Sudan v. Owens line of cases and the Bellevue helicopter line of cases. [00:47:23] Speaker 06: The issue must be looked at because [00:47:27] Speaker 06: Russia, the Russian Federation was a sovereign with the de novo non discretionary level of review, and I'll say, even if not that Mr Lieberman and how bad put in a case where a plaintiff under Rule 60 be challenged [00:47:42] Speaker 06: jurisdiction in its own case. [00:47:44] Speaker 06: And the court still looked at that case. [00:47:46] Speaker 06: I'm referring to the Lee Memorial case. [00:47:48] Speaker 06: And in that case, it wasn't finality. [00:47:51] Speaker 06: The jurisdictional question was reviewed again under a different standard and one which we don't believe applies here, the arguable basis test. [00:47:59] Speaker 06: We believe it would be the Bell helicopter test. [00:48:01] Speaker 06: But the notion that no party can ever challenge the 2010 decision on jurisdiction doesn't square with Lee or Bell. [00:48:10] Speaker 05: Actually, that's not the argument being made. [00:48:13] Speaker 05: It's whether or not tenants can challenge it through Rule 50B. [00:48:21] Speaker 06: That is a secondary argument. [00:48:23] Speaker 05: No. [00:48:24] Speaker 05: I mean, you're stating the statement very broadly, and that's not what we're discussing here. [00:48:31] Speaker 05: The chief judge's questions didn't imply that. [00:48:35] Speaker 06: whenever TENEM can challenge jurisdiction in this case. [00:48:40] Speaker 06: And I think it's clear from Vera and other cases that it is entitled to challenge subject matter jurisdiction. [00:48:46] Speaker 06: I just want to be clear that we disagree with Mr. Lieberman's argument that there's no way to revisit the 2010 decision taking. [00:48:56] Speaker 05: Well, actually he suggested and in his brief appellee suggests ways that this can come up. [00:49:08] Speaker 06: Right. [00:49:10] Speaker 06: We think we do satisfy the standing test because, again, of the allegations of privity that there are cases that hold that that kind of relationship, I would not call TENEM a legal representative, but that a privity relationship satisfies the legal representative prong of 60B. [00:49:29] Speaker 06: And so for that reason, TENEM should be able to raise it in this context. [00:49:36] Speaker 05: And if not this time, you're not claiming tenant is a legal representative. [00:49:40] Speaker 05: You're not claiming tenant is a party. [00:49:44] Speaker 06: Tenant is a an entity alleged to be in privity. [00:49:50] Speaker 06: There are cases that hold that a privity relationship makes a party a legal representative. [00:49:55] Speaker 06: I don't want to necessarily use that that word without noting that the definition of it is quite broad. [00:50:05] Speaker 01: Okay, let me make sure my colleagues don't have additional questions for you. [00:50:07] Speaker 01: Miss Kaneki. [00:50:11] Speaker 01: Thank you, counsel. [00:50:12] Speaker 01: Thank you to all counsel. [00:50:13] Speaker 01: We'll take this case under submission.